LACK OF TRUST IN BANKS THREATENS STABILITY IN FINANCIAL SECTOR – BoG
‘’ Banks are indispensable to economic growth and therefore have moral obligations to safeguard financial integrity in the interest of depositors and stakeholders, and the economy at large. The critical issues to focus on regarding the chosen theme include the ethical frameworks that guide banks policies and procedures, and the values that shape the actions of bankers’’,
The Governor of the Bank of Ghana (BoG), Dr. Ernest Addison, says the banking industry thrives on trust, and the lack thereof threatens the stability and sustainability of the entire financial sector, with adverse economic consequences.
This was indicated in a presentation by the Head, Ethics and Internal Investigations Office of BoG, Mr Bernard Otabil, on behalf of the Governor yesterday at the 27th National Banking and Ethics Conference, under the theme ‘’ Redefining Professionalism through Ethics’’.
According to the Governor, the focus on professionalism and ethics being championed by the Chartered Institute of Bankers inspires a lot of hope for the industry, as such, ethical behaviour in banking and financial markets has never been relevant as it is today because of the moral and economic efficiency issues involved.
The core mandate of banks, he said, was financial intermediation, and any misconduct by industry players eroded public confidence, and therefore proved detrimental to the entire sector.
‘’ Banks are indispensable to economic growth and therefore have moral obligations to safeguard financial integrity in the interest of depositors and stakeholders, and the economy at large. The critical issues to focus on regarding the chosen theme include the ethical frameworks that guide banks policies and procedures, and the values that shape the actions of bankers’’, he added. Dr. Addison asserted that professionalism was governed by Code of Ethics and commitment to values such as accountability, respect, self-regulation, honesty, and integrity on the job which shows that professionalism cannot exist without ethics.
‘’Being ethical is inherent in the concept of professionalism. An expert in any field, particularly banking and finances, with weak ethical values becomes an institutional liability. For this reason, the Bank of Ghana collaborated with the CIB, Ghana, and the Ghana Association of Banks to launch the Ghana Banking Code of Ethics and Business Conduct, which reinforces provisions in the Chartered Institute of Bankers, Ghana, Act 2019 (Act 991). The code is expected to uphold the tenets of professionalism and promote strong ethical standards in the banking industry’’, the Governor said.
In addition to the code of ethics, he further noted that the risk management approach in the banking sector should make room for the assessment and management of culture and conduct risks. ‘’These rises are intertwined, and unethical behaviours are often associated with multiplicity of cultural factors which must be managed diligently, just like all other risks’’, he added.
Dr. Addison included that the Bank of Ghana’s code of ethics and Ethics Policies provide the framework for ethical decision-making and conduct with the bank.
He continued: ‘’ Separate ethics rules and standards have also been developed as a guide for bank supervisors and examiners as safeguard s from ethical misconduct in the line of duty. These initiatives aim to build a strong and healthy organizational culture that would ensure that the bank achieves its mandate based on sound ethical principles’’.
He concluded by hoping that the collective efforts, from the regulator, banking institutions and their associations, training institutions like CIB, and the individual bankers themselves,will help stem the tide of unethical behaviours. Also, reduce the occurrence of ethical violations to the barest minimum, or eliminate them completely, to raise the levels of trust and confidence of the public in our industry.
Source: the chronicles
